Thread by @CryptoEdgar_

1/21
Stablecoins

It’s been a brutal week for most crypto holders with extreme selloffs on nearly all assets.
A lot of people fled to the safety of stablecoins thinking they were safe.

But UST depegged and FUD now also reached USDT.
Do your research & know your investment! 🧵👇

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Coins we're looking at:
* #USDT
* #USDC
* #BUSD
* #UST
* #DAI
* #FRAX
* #MIM
* #TUSD
* #USDP

It's a lot of information to take in but it's important to understand in what asset you park your money. Always DYOR! This is meant as a rough guide for understanding.

3/
#USDT
* Controversial, yet most popular.
* Lots of indications that the 1:1 fiat to crypto backing they claim to have is in fact false.
* April 2019: Tethers own lawyers had to admit that the company had only 74% of the #USDT in fiat backing (tinyurl.com/3ce233zc).

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* Issues with potential ties with @bitfinex. Many of the directors at #USDT are in fact also directors at the exchange
* Has been able to keep the $1 peg extremely well which helped their success
* ERC-20 token
* Centralised

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#USDC
* Launched in 2018 as a collaboration between @circlepay (Blockchain holding company that's supported by @GoldmanSachs ) & @coinbase
* Backed 1:1 with escrow reserves for each #USDC in circulation (disputed by #PAX, read below 👇)

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* Audits for backing: centre.io/usdc-transpare…
* ERC-20 token
* Centralised (Trust @coinbase & @circlepay. They can blacklist or freeze assets)

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#BUSD
* Launched in September, 2019 by @PaxosGlobal and @binance, issued by #Paxos
* Backed 1:1 with dollars vs their tokens
* Audits for backing: paxos.com/attestations/
* ERC-20 token with BEP-2 support

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* A big problem is its unavailability on other exchanges besides @binance thus few places to cash out, need to exchange (coingecko.com/en/coins/binan…)
* Centralised

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#UST
* Launched in September 2020 by @terra_money in partnership with @BittrexGlobal
* Scalable
* Decentralised
* Algorithmic stable coin (through seigniorage, $LUNA should preserve $UST stability and security)
* Depegged, could restore peg but might've lost all trust

10/
#DAI
* Launched in December 2017 by @TheDaoMaker
* Decentralised
* Had issues with peg due to the usage in many DeFi protocols while not enough #DAI was in circulation
* Not backed by fiat currencies. It uses smart contracts which are backed by collateralised crypto debts

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* Partly collateralised by #USDC which is centralised. #daistats (daistats.com/#/) gives a good representation of the current situation
* Minting of #DAI is more troublesome than some other alternatives

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#FRAX
* Launched in December 2020 by @fraxfinance (formally known as Decentral Bank)
* Part of a two-token model, the stable coin $FRAX and the Frax Share token $FXS
* Decentralised with centralised backing

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* Anyone with USDC (50%) & FXS (50%) can mint FRAX. Thus, its partially collateralised due to #USDC reserve always being lower than #FRAX reserve.
* Risk: Algorithmic stable coin -> What will happen in times of heavy volatility once the peg is broken? Who dares to buy&sell?

14/
#MIM
* Launched in May, 2021
* Soft pegged to USD
* Decentralised
* Was highly connected to #UST due to the degenbox strategy and #UST-#MIM LP pool. Risk was reduced in time.
* Backed by interest-bearing tokens (ibTKNS). For example: yvYFI, yvUSDC, yvUSDT, xSUSHI, and yvWETH

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* This means that you can deposit liquid tokens such as #USDC into SushiSwap, receive a receipt token and use this to deposit into Abracadabra to mint a liquid asset, #MIM
* If you've got collateral on @MIM_Spell, you can always withdraw for $1. Otherwise more problematic.

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#TUSD
* Launched in January 2018 by @TrustToken
* Backed 1:1 with dollars vs their tokens
* Audits for backing: real-time-attest.trustexplorer.io/truecurrencies
* ERC-20 token
* Have a lot of partnerships with banks and other third party companies

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* A 'one-click redemption' feature. Redeem your #TUSD for fiat with a click of a button. Of course, this required AML & KYC.
* TrustToken also offers #TCAD, #TAUD, #TGBP and #THKD
* Centralised. You need to place your trust with the TrustToken company.

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#USDP
* Launched in September 2018. Rebranded in August 2021 from #PAX to #USDP
* Backed 1:1 with dollars vs their tokens
* Audits for backing: paxos.com/attestations/
* You can find the attestions for their three assets. #USDP, #BUSD and #PAXG

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* You can create an account on their website (paxos.com) and exchange your #USDP for fiat currency, gold and more
* ERC-20 token
* Dan Burstein from @PaxosGlobal claims that the #USDC and #USDT reserves are mostly backed by corporate debt obligations and more.

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* As a result, he says, #USDC is backed only 61% by cash or cash equivalents and #USDT only for 5%.
His full insights can be read here: paxos.com/2021/07/21/a-r….
* Transfers of #USDP can be paused or frozen if needed
* Centralised

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I've summarised all this information by reading through a multitude of articles, posts, videos and more. If you think any of the information is incorrect, feel free to reach out.

If you liked this thread, please Like♥️ and Share🔁 the FIRST post.

Stay safe!